Appreciating the Evolution of ERP

ERP News – worldwide – erpnews.com – Now that we’re all on the same page, let me provide some context of the evolution of ERP (i.e., how did we get here?). Afterall, you can’t truly appreciate art without art history to provide context.

Evolution of ERP is Like the Evolution of Cars

My sister-in-law just bought a BMW 3 series and I was looking at the car (since I’m not allowed to drive it) remarking how great it is. It has many performance, technology, efficiency, and design features that as a whole make it highly desirable. And apparently I’m not the only one that thinks this since the car has been on Car & Driver’s 10 best list an unprecedented 22 years in a row and has evolved as a standard of the “best available sedan on the road.”

However, looking back at the 1979 (which happens to be the year that QAD started) BMW 3 series, you may be shocked to see what is missing. Now standard features like four doors, automatic transmission, power windows, air conditioning, and more, were not available. So obviously over time pretty substantial evolutionary features have been introduced. Amazing what people, time, and technology will do!

Similar to the 3 series, ERP systems have also drastically evolved. Tracing back to the earliest inklings of ERP you could go back more than 50 years, perhaps back even to times when things were first starting to be manufactured at scale as part of the industrial revolution. But for brevity, I’ll focus on the 1960s to today. Back then when a manufacturer got an order from a customer for a widget, you had to plan how to make it using materials requirements planning (MRP). If I remember back to my days of studying for my APICS CPIM, you can calculate MRP by hand, and it used to be done, however like many jobs, computers soon took over due to their efficient and error-free tendencies.

From MRP to ERP

As MRP evolved into the 70s and 80s with computers doing more and more of the heavy lifting, it was still only one small subset of the business, production, that really benefited from the system. MRP then evolved into manufacturing resource planning (MRP II) which incorporated more data from all of manufacturing and could now answer “what-if” questions. Some called MRP II “closed-loop MRP.”

Notice that we’re now well into the 80s and the term and solution enterprise resource planning hasn’t been mentioned yet. It wasn’t until the early 90s that mentions of ERP first started. With ERP you now had the ability to view data and perform functions across the whole enterprise. With each new feature and function the software became more robust, and the people it supported became more skilled.

What is a Modern ERP?

That brings us to today. Just like a modern 3 series, a modern ERP system promises to impress with features, functions and benefits that lead to positive user experiences. As user experiences move towards more consumer-driven applications, ERP today looks very different than ERP (or MRP or MRP II) from yesteryear. A modern ERP system is not a trivial thing, but it should allow individuals and organizations to be more effective, which is why we have the vision for all customers, the Effective Enterprise.

So take a look at the 1979 BMW 3 series against the most current version. While the 1979 version is a “classic,” I would rather have the current version for every day. When you look at 1979 to today, of course it looks like a big jump. But if you look at the evolution, it’s not as drastic. And while the design has evolved, it’s also many things “under the hood” that have changed as well (you now get those power windows that were lacking before).

And the same goes for ERP: changes to both the design (user interface) and under-the-hood, back-end technology have both drastically evolved leading to a similar evolution.

So as with any great thing, there is always room for improvement that evolves things for the better; whether it’s a car or your ERP system. And fortunately I know where to get my hands on a modern ERP. Unfortunately I don’t know how to get a brand new BMW.